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Petitioners' purchase of Seattle Pump stock is not a trade
or business. The Internal Revenue Code does not define trade or
business for this purpose. Commissioner v. Groetzinger, 480 U.S.
23, 27 (1987); Estate of Yaeger v. Commissioner, 889 F.2d 29, 33
(2d Cir. 1989), affg. T.C. Memo 1988-264. "[T]o be engaged in a
trade or business, the taxpayer must be involved in the activity
with continuity and regularity and * * * the taxpayer's primary
purpose for engaging in the activity must be for income or
profit." Commissioner v. Groetzinger, supra at 35. The
ownership of stocks and bonds is not generally a trade or
business under section 162. Higgins v. Commissioner, 312 U.S.
212 (1941)(managing securities investments and collecting income
therefrom generally is not a trade or business, regardless of the
amount invested, continuity of effort, or amount of time devoted
to the activity). The purchase of the stock of one company is
not ordinarily an activity of an ongoing trade or business. Id.
There is no evidence that petitioners bought any stock other than
that of Seattle Pump or that were in a trade or business of
buying stock. Devoting one's time and energies to the affairs of
a corporation is generally not, of itself, a trade or business of
the person so engaged. Whipple v. Commissioner, 373 U.S. 193,
202 (1963).
We conclude that petitioners held the Seattle Pump stock as
an investment, not as part of a trade or business. Thus, the
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